Mobile Commerce Isn’t Only About Point-of-Sale Transactions
Two-thirds of Americans between the ages of 18 and 34 feel more naked without their smartphones than their wallets, according to a consumer survey conducted earlier this year by Kelton Research on behalf of MasterCard Worldwide. Thirty-four percent of respondents 35 and over expressed the same sentiment. But who says you must make a choice between one or the other? That’s what’s so compelling about mobile commerce— as smartphones assimilate the functionality of wallets, consumers can consolidate their cash, credit cards, photos, and even their personal identification into a single, all-powerful, and password-protected accessory, a kind of always-on Swiss Army Knife giving users the flexibility to make voice calls, surf the web, access turn-by-turn directions, play Angry Birds, and pick up the tab at lunch. Anything a wallet can do, a smartphone can do it better.
Last week’s column looked at the accelerating push behind Near Field Communications-based contactless payments, a drive spearheaded by mobile operators, financial services providers, digital solutions giants and savvy startups alike. Make no mistake: A simplified, streamlined point-of-sale transaction process is undoubtedly a boon to businesses of all sizes. But mobile commerce promises so much more, especially for smaller companies without the marketing budgets of larger rivals. Much as conventional wallets often contain more than cash and plastic, so, too, can digital wallets transcend tap-and-pay transactions to support a vast array of interrelated mobile marketing efforts including merchant loyalty programs, coupons, rebate offers, and other targeted incentives. Not only that, but smartphones can also bolster promotions with real-time deal alerts, location-specific calls-to-action, and more, redefining where, when, and how brands and retailers interact with their customers. With no more printed coupons to leave behind on the kitchen counter and no more loyalty cards to lose, both retailers and customers win.
It may all sound too good be true, and to be fair, the NFC infrastructure rollout remains in its formative stages, although major companies like Google, Verizon Wireless, AT&T, Visa, MasterCard and American Express are making major financial and technological commitments. But at the same time consumers are increasingly transferring their shopping behaviors to mobile devices, relying on smartphones and tablets to make purchases, compare prices, and redeem coupons— compelling evidence that the shift to a full-fledged, multi-faceted mobile commerce paradigm is already happening.
A new survey published by L.E.K. Consulting reports that two-thirds of smartphone or tablet owners have used their devices to conduct purchases— 39 percent (dubbed “Active Mobile Consumers”) initiate mobile-based transactions every month (excluding music and video downloads), and 60 percent of them rely on their devices for product research at least once every month. In addition, more than half of Active Mobile Consumers used at least one mobile coupon application during the past six months— close to one-third checked a pricing comparison app, and 29 percent leveraged a loyalty app or similar offer-themed tool, all while roaming retailers’ store aisles. And while it’s critical that merchants continue to respect consumer privacy, more than half of the Mobile Active Consumers are willing to share their location with brands in exchange for receiving real-time offers when they check in at local retailers and restaurants via foursquare, Google Places or other location-enabled mobile social networking tools. Most astounding of all, 37 percent of Active Mobile Shoppers are willing to grant brands the freedom to track their movements 24/7 in order to receive special deals.
Small businesses can begin laying the groundwork now to introduce more ambitious mobile commerce efforts in the future. It begins with mobile marketing campaigns— whichever approach you choose (mobile ads, SMS alerts, branded apps, etc.), it’s imperative to deliver incentives so valuable and engaging that customers feel comfortable sharing their personal data. These offers should be unique to the mobile channel and should exploit its real-time, location-targeted capabilities, with an emphasis on immediate gratification— for example: coupons, discounts, rewards or loyalty points. There are a multitude of options, and all can help merchants and their customers begin acclimating now to the digital wallet era to come. Mobile commerce is the future of retail, but when it comes to mobile marketing, there’s no time like the present.
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